YPF aims at producing 30,000 daily barrels

YPF aims at producing 30,000 daily barrels

Company expects to boost oil output by 50 percent by the end of the year at Vaca Muerta

Production at the Vaca Muerta shale oil and gas formation spread across Neuquén and Mendoza could end the year at 30,000 barrels of oil per day, meaning a hike of 10,000 from today’s 20,000, state-owned energy firm YPF Non-Conventionals manager Pablo Iuliano said yesterday.

“YPF is the only company in the country that is using the new technology, called Walking System,” Iuliano said, expressing optimism about the level of investment injected into Vaca Muerta and the use of innovative techniques.

Walking System “allows the movement of the drilling equipment to be sped up, significantly reducing the amount of time spent on transport between wells at the same site, and thereby generating total time saving of nearly 50 percent.”

Iuliano said that Vaca Muerta ended April with an annual investment worth US$3 billion for the development of recovery infrastructure.

In January, YPF CEO Miguel Galuccio said he had advanced in talks with Malaysia’s state oil company Petronas toward an investment deal, which would be the second major agreement following the initial US$1.6 billion provided by the United States’ Chevron.

Higher output by the end of the year will be the result of the incorporation of such investment and new technology.

“The time spent transporting drills represents a significant percentage of the total time spent on the construction of wells, and that’s the reason YPF has incorporated the technology,” said Iuliano.

He added that aside from allowing quicker transportation, Walking System has other functions, including “pressure tests for pre-assembled components and the minimization of fluid (such as rain) movements to and from the equipment.”

To date, YPF has drilled 168 wells at Vaca Muerta, with an average depth of 3,000 metres and most of them vertical.

Nonetheless, the hyrdraulic fracturing method has allowed for positive results in horizontal wells, of which there is only one, although 14 more are expected to be drilled by the end of the year, the YPF executive said.

YPF’s first horizontal well produces 400 barrels of oil a day and has a length of 1,300 metres at a depth of 2,700 metres.

Three-hundred workers currently work at the base set up by the company in the Loma Campana region of the formation, close to the town of Añelo, with daily transport provided from the cities in which they reside.

The company invested US$2.17 billion in Vaca Muerta during 2013, 620 percent more than what was injected in 2011, while the amount is expected to rise by 50 percent by the end of 2014.

YPF also has a workforce 25 percent larger than the staff it employed in 2010.